Examination of Witnesses (Questions 880
- 899)
WEDNESDAY 23 MAY 2007
MR CLAUDE MAILLEAU AND MR JACKY BONOTAUX
Q880 Chairman:
Yes.
Mr Bonotaux: If you come back to the specifics
of Bordeaux vineyards, crisis distillation is anecdotal. It is
the first time in a century that we have used distillation because
the vast majority is AOC wines. In many other wine-producing regions,
particularly Languedoc/Roussillon, it was table wine, where their
production was over twice the usual production of AOC wines here,
so they had to distil. It is the first time in a century and the
quantity is infinitesimal. It is anecdotal.
Q881 Chairman:
A straight market analysis would be that, in order to protect
your AOC wines, you want to remove the lower end from the market.
I was going to say the rubbish but I do not mean that in a pejorative
way. The rubbish will depress prices.
Mr Mailleau: Are you talking about rubbish wines
here or elsewhere?
Chairman: I would never dream of talking
about rubbish wines here in Bordeaux!
Q882 Viscount Ullswater:
On the financing of this reform, it has been proposed that crisis
distillation should be discontinued. Would you wish to see money
put into a "national envelope" which in a crisis could
be used for distillation by Member States?
Mr Mailleau: All I can say is that the current
position is to maintain the OCM as it is under the first pillar.
Q883 Viscount Ullswater:
You still have not said how you will resolve your so-called "crisis"
here.
Mr Mailleau: In 2007 for Bordeaux it is practically
back to a balanced situation between production and sales as a
result of a reduced production of the 10,000 hectares that were
grubbed-up and also by severely restricting yields. Production
has gone down and sales have gone up. The current position is
that the light is very much at the end of the tunnel even if the
prices have not yet got back up to where they were five or six
years ago.
Chairman: The trouble with a light at
the end of the tunnel is that it could be a train hurtling towards
you!
Q884 Lord Cameron of Dillington:
If you had lots of money in Pillar 2 to spend in this region of
Bordeaux, what could you do to diversify the economy, not only
in the countryside but in the towns, to create other employment?
Mr Mailleau: Not much. Wine tourism. Diversification
in the wine profession is, again, anecdotal.
Q885 Viscount Ullswater:
If this land was removed from growing vines because of the financial
affairs, what would happen to the land? Would it return to agriculture
and grow cereal crops? Or would it just lie fallow with the social
consequences for people?
Mr Mailleau: Obviously we have already had the
figures for employment and you can imagine, therefore, the direct
impact on employment. There is also the social impact that, when
vine growing is flourishing, it attracts people into the country,
even urbanites, to villages and brings life to a village. But,
if you reverse that, you can imagine that that leads to desertification
of the villages and, on the one hand, you could get land lying
fallow and have a rural wasteland as we have had industrial wastelands.
There is no geography yet for the grubbing-up, so we are going
to have something of a patchwork. It is not as if you can say,
"We will put a square of 10,000 hectares there". It
will be a bit here, a bit there, it will be dotted around, so
it is difficult to see direct social or economic consequences.
Q886 Chairman:
Can we just pause for a moment. We have been having a fascinating
discussion but I just want to pause and take the Commission's
proposals to see what your view of them is. As I understand it,
you are saying that the French position at the moment is that
there should be maintenance of crisis distillation. Is that correct?
Mr Mailleau: At least for the system to be continued
for crisis distillation, yes.
Q887 Chairman:
OK. Could I just put one point to you on crisis distillation?
This is basically an insurance policy; and, if it is an insurance
policy, why should the taxpayer pay for it and not the industry?
Mr Bonotaux: Solidarity.
Q888 Chairman:
The European model of agriculture, I know, I know. You have got
some of the richest operators.
Mr Mailleau: You are trying to lead me down
avenues of negotiation which are really beyond my ken and purview.
It is true that, when you look at the use of crisis distillation,
there has been some abuse of crisis distillation in neighbouring
and friendly countries of France.
Q889 Chairman:
But not in France?
Mr Mailleau: Not in Bordeaux. Not really in
France.
Mr Bonotaux: Just to give you a quick example,
there have been growers in Bordeaux and in Gironde who have preferred
to sell their barrel of wine for less than the distillers offered
them.
Q890 Chairman:
We have heard that, yes.
Mr Bonotaux: Because they were proud of their
product, they were producing wine to be drunk and not to be distilled.
Q891 Chairman:
We have heard that and recognise that. Can I just ask you, what
is the position on grubbing-up?
Mr Mailleau: The French position is that grubbing-up
leads to a loss of means of production. It means a loss of capacity.
It also involves a somewhat contradiction, in that why allow people
to pull up their vines and say, "All right, here we go, here
is our policy on grubbing-up" and then say "planting
rights"? Why do you pull up to replant?
Q892 Chairman:
Let us take it step by step. If you had grubbing-up and a continuation
of the ban on planting rights, what would be the response to that?
Mr Mailleau: That is much more coherent, much
more logical.
Q893 Chairman:
The justification for having grubbing-up and removing the ban
on planting rights is that that is a means by which you can get
either the inefficient, ineffective, or uneconomic producers out
of production, and create the opportunity but only the opportunity,
at the producer's risk, for coming into the market and trying
to make a go of it, so you get a dynamism into the industry.
Mr Mailleau: We understand the principle but
I am not sure in real terms whether that would be what would happen.
Chairman: The politics are too difficult!
Q894 Viscount Brookeborough:
Do the producers in Bordeaux agree with the policy that you support?
Mr Mailleau: The policy has not been dreamed
up in an office in Paris, it is based on the feedback of information
through the structure of the industry in the field.
Q895 Viscount Brookeborough:
My other question is; when we talk about social consequences and
diversification, people going into different jobs, in a way we
have spoken about it as if this is the first time that farmers
have ever been asked to go and do something different. In a way
it could be insulting to their education and to what they are
to suggest that they can do nothing else. Other areas have gone
through reform in farming sectors and we are going through that
in the United Kingdom and people are diversifying, they are becoming
part-time farmers, and they are finding they can do jobs other
than farming. Why can that not happen here?
Mr Bonotaux: Just a quick comment in reply on
the social consequences and diversification. There is a difference
that has to be made between wine-growing and, shall we say, agriculture
generally. Wine-growing, particularly with an AOC as in Bordeaux,
is a long-term investment. You plant a vine, you are not even
allowed to pick a grape off it for three years, so you have already
got a three-year investment before you can pick your first grape,
and you have all the other facilities of the winery itself. It
is a medium to long-term investment. It is easier to transform
a farm with a meadow of sheep than it is to transform a vineyard.
Mr Mailleau: It is not a question of insulting
the sheep farmer but at a macroeconomic level there is a loss
of richness. You said it could be insulting.
Viscount Brookeborough: I wanted a different
word because I did not mean that they were insulting anybody.
Q896 Lord Plumb:
I think we can understand your reluctance to say whether you would
agree with the policies as set out by the Commission for the reform
of the wine regime. Having seen what we have seen in a very short
time across the area of Bordeaux, the vineyards at the moment
look extremely healthy, and we have seen two very good examples,
a co-operative and an independent wine producer, that are both
extremely efficient, so one goes away believing there is no crisis
in the wine industry in Bordeaux. You used the word "solidarity",
which is one we have heard over many years, particularly as someone
who has been so involved in the development of Europe and the
Common Agricultural Policy. There is another word which is coming
very much to the fore and that is "subsidiarity" rather
than "solidarity". Subsidiarity in that you, in the
application of measures that are suitable for this region to get
the benefit of wine production, are really in competition with
New World wines, not just with other wines that are produced within
Europe. I wonder how you see this. Having seen the graph of the
consumption of French wine as a whole compared with New World
wines, the consumption goes down for France and it goes up for
New World wines. You have to look at that as a whole in the context
of the proposals for reform in the first place and then decide
in a region where you are obviously efficient that you can make
the best of the market.
Mr Mailleau: You also have to take into account
the type of product that needs to be marketed to meet market requirements.
We are aware that there are consumers out there who are not looking
for the type of wine that Bordeaux produces, hence the decision
of the French Government to say that perhaps the money has that
has been allocated, buttonholed, for grubbing-up, or at least
a large part of it, could be put to better use for the promotion
and aid to exporting of French wines, to better marketing, better
communication and sales and exports of French wines.
Q897 Lord Plumb:
One of the independent wine producers we met said we could remove
subsidies but how could we maintain support either through Pillar
1 or Pillar 2 from the European Union. He then was saying that
possibly there could be a hectarage payment removing the support
at the moment on the basis of crisis distillation as one example
and paying it in a similar way to the way the Single Payment is
made for agriculture under the CAP. Is that something that is
worthy of support? We are a committee who will come forward with
our own report and we were reminded yesterday that the Commission
will first hear the proposals from the Commissioner, who will
make her statement on 4 July, and then on 16 July the Council
of Ministers are going to consider the proposals. There is not
much time to be doing a lot of thinking between now and then other
than to come forward with some definite proposals on what is going
to happen.
Mr Mailleau: I am not sure that I am the right
person or in the right position to answer you on that, particularly
with the recent change in government. I have not got any purview
to come forward and give the ministerial position.
Q898 Chairman:
We appreciate that.
Mr Mailleau: I would prefer the answer to your
question be given to you from somebody much higher up on the ministerial
ladder.
Q899 Lord Plumb:
I fully appreciate that. I was merely making the point that it
was an independent grower who made the suggestion to us. I am
not saying this is a suggestion from us. It was a grower who suggested
this, which I thought was interesting.
Mr Mailleau: If you listen to the people in
the profession, in the wine trade, you will get a whole hodgepodge
of proposals, you will get a complete kaleidoscope of solutions,
some of which will be completely in opposition and in contradiction.
For example, I could introduce you to a grower who grubbed up
50 hectares of vines and he has gone back to his former profession
as a stock breeder who is going to benefit from European aid under
the Single Payment, but that is not representative in any way
of a trend; it is a one-off case.
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